There are many ways of handling the affairs of insolvent or financially distressed business debtors. One is to keep the debtor in business and restore the business to profitability. Another is to put the debtor out of business, sell the assets and distribute the proceeds among creditors.
Creditors usually prefer to rehabilitate a distressed debtor by voluntary out-of-court settlement. When rehabilitation is not possible they may liquidate assets outside of bankruptcy proceedings through a general assignment for the benefit of creditors. The credit professional that is familiar with both of these methods, and their advantages and disadvantages, will be able to participate effectively in whatever action is taken when a customer becomes insolvent.
After viewing this module, students should understand:
Toni Drake brings over 30 years of oil and gas credit experience to the table. Toni holds a CCE, NACM’s most prestigious designation. After earning her CCE, she went on to attend and excel at NACM’s Graduate School of Credit and Financial Management to further her education in the field of credit. Toni continues to support the credit profession as a speaker and instructor at events like NACM’s annual Credit Congress.
Abby Odneal started at NACM Southwest in a part-time summer position. She liked it so much that 30 years later she is now the Chief Operating Officer. Her long tenure at NACM has given her the opportunity to be actively engaged in all areas of NACM including Collections, Credit Reporting, Industry Groups, Education, and their Adjustments department. Abby also has a degree in accounting from the University of North Texas and is a Certified Association Executive.